GEO GROUP INC/THE (GEO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:GEO - US36162J1060 - Common Stock
16.22 USD
-0.15 (-0.92%)
Overall GEO gets a fundamental rating of 4 out of 10. We evaluated GEO against 80 industry peers in the Commercial Services & Supplies industry. While GEO is still in line with the averages on profitability rating, there are concerns on its financial health. GEO has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
- GEO had positive earnings in the past year.
- GEO had a positive operating cash flow in the past year.
- Each year in the past 5 years GEO has been profitable.
- GEO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- The Return On Assets of GEO (6.23%) is better than 77.50% of its industry peers.
- GEO has a Return On Equity of 15.60%. This is in the better half of the industry: GEO outperforms 77.50% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 6.18%, GEO is in the better half of the industry, outperforming 62.50% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for GEO is below the industry average of 10.58%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.23% | ||
| ROE | 15.6% | ||
| ROIC | 6.18% |
ROA(3y)2.34%
ROA(5y)2.22%
ROE(3y)7.12%
ROE(5y)8.19%
ROIC(3y)7.94%
ROIC(5y)6.71%
1.3 Margins
- GEO's Profit Margin of 9.38% is amongst the best of the industry. GEO outperforms 85.00% of its industry peers.
- In the last couple of years the Profit Margin of GEO has declined.
- Looking at the Operating Margin, with a value of 11.03%, GEO is in the better half of the industry, outperforming 72.50% of the companies in the same industry.
- In the last couple of years the Operating Margin of GEO has remained more or less at the same level.
- GEO's Gross Margin of 25.51% is in line compared to the rest of the industry. GEO outperforms 42.50% of its industry peers.
- In the last couple of years the Gross Margin of GEO has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.03% | ||
| PM (TTM) | 9.38% | ||
| GM | 25.51% |
OM growth 3Y0.06%
OM growth 5Y1.08%
PM growth 3Y-26.63%
PM growth 5Y-28.78%
GM growth 3Y-1.24%
GM growth 5Y1.46%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so GEO is destroying value.
- GEO has more shares outstanding than it did 1 year ago.
- GEO has more shares outstanding than it did 5 years ago.
- GEO has a better debt/assets ratio than last year.
2.2 Solvency
- GEO has an Altman-Z score of 1.68. This is a bad value and indicates that GEO is not financially healthy and even has some risk of bankruptcy.
- The Altman-Z score of GEO (1.68) is comparable to the rest of the industry.
- The Debt to FCF ratio of GEO is 58.99, which is on the high side as it means it would take GEO, 58.99 years of fcf income to pay off all of its debts.
- GEO's Debt to FCF ratio of 58.99 is in line compared to the rest of the industry. GEO outperforms 46.25% of its industry peers.
- GEO has a Debt/Equity ratio of 1.02. This is a high value indicating a heavy dependency on external financing.
- With a Debt to Equity ratio value of 1.02, GEO is not doing good in the industry: 67.50% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.02 | ||
| Debt/FCF | 58.99 | ||
| Altman-Z | 1.68 |
ROIC/WACC0.65
WACC9.5%
2.3 Liquidity
- GEO has a Current Ratio of 1.62. This is a normal value and indicates that GEO is financially healthy and should not expect problems in meeting its short term obligations.
- The Current ratio of GEO (1.62) is comparable to the rest of the industry.
- GEO has a Quick Ratio of 1.62. This is a normal value and indicates that GEO is financially healthy and should not expect problems in meeting its short term obligations.
- GEO's Quick ratio of 1.62 is fine compared to the rest of the industry. GEO outperforms 65.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.62 | ||
| Quick Ratio | 1.62 |
3. Growth
3.1 Past
- The earnings per share for GEO have decreased strongly by -18.68% in the last year.
- The earnings per share for GEO have been decreasing by -30.77% on average. This is quite bad
- The Revenue for GEO has decreased by -16.47% in the past year. This is quite bad
- GEO shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -0.44% yearly.
EPS 1Y (TTM)-18.68%
EPS 3Y-19.54%
EPS 5Y-30.77%
EPS Q2Q%19.05%
Revenue 1Y (TTM)-16.47%
Revenue growth 3Y2.41%
Revenue growth 5Y-0.44%
Sales Q2Q%13.13%
3.2 Future
- Based on estimates for the next years, GEO will show a very strong growth in Earnings Per Share. The EPS will grow by 26.69% on average per year.
- GEO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.34% yearly.
EPS Next Y14.92%
EPS Next 2Y35.5%
EPS Next 3Y26.69%
EPS Next 5YN/A
Revenue Next Year6.86%
Revenue Next 2Y10.87%
Revenue Next 3Y7.34%
Revenue Next 5YN/A
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 21.92, GEO is valued on the expensive side.
- Based on the Price/Earnings ratio, GEO is valued a bit cheaper than the industry average as 71.25% of the companies are valued more expensively.
- GEO's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.82.
- A Price/Forward Earnings ratio of 11.78 indicates a reasonable valuation of GEO.
- Based on the Price/Forward Earnings ratio, GEO is valued cheaper than 87.50% of the companies in the same industry.
- When comparing the Price/Forward Earnings ratio of GEO to the average of the S&P500 Index (25.95), we can say GEO is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.92 | ||
| Fwd PE | 11.78 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, GEO is valued a bit cheaper than 73.75% of the companies in the same industry.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of GEO is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 85.71 | ||
| EV/EBITDA | 8.92 |
4.3 Compensation for Growth
- GEO's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- The decent profitability rating of GEO may justify a higher PE ratio.
- GEO's earnings are expected to grow with 26.69% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.47
PEG (5Y)N/A
EPS Next 2Y35.5%
EPS Next 3Y26.69%
5. Dividend
5.1 Amount
- GEO does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
GEO GROUP INC/THE / GEO FAQ
Can you provide the ChartMill fundamental rating for GEO GROUP INC/THE?
ChartMill assigns a fundamental rating of 4 / 10 to GEO.
What is the valuation status of GEO GROUP INC/THE (GEO) stock?
ChartMill assigns a valuation rating of 6 / 10 to GEO GROUP INC/THE (GEO). This can be considered as Fairly Valued.
Can you provide the profitability details for GEO GROUP INC/THE?
GEO GROUP INC/THE (GEO) has a profitability rating of 6 / 10.
Can you provide the expected EPS growth for GEO stock?
The Earnings per Share (EPS) of GEO GROUP INC/THE (GEO) is expected to grow by 14.92% in the next year.
Is the dividend of GEO GROUP INC/THE sustainable?
The dividend rating of GEO GROUP INC/THE (GEO) is 0 / 10 and the dividend payout ratio is 0%.